US stock futures steady with China trade talks, Q3 earnings in focus
On Monday, Mizuho (NYSE:MFG) Securities adjusted its outlook on Cloudflare Inc . (NYSE:NET), increasing the price target to $160 from the previous $130, while maintaining a neutral stance on the stock. The upward revision follows Cloudflare’s latest earnings report, which revealed a 27% year-over-year revenue increase, surpassing both Mizuho’s and Wall Street’s expectations of around 25%. According to InvestingPro data, the company’s actual revenue growth reached 28.76%, with an impressive gross profit margin of 77.32%.
Cloudflare has demonstrated a consistent improvement in its deal closure rates, marking the fifth straight quarter of double-digit year-over-year growth in sales productivity. Additionally, the company has plans to significantly boost its sales capacity throughout the current year. The stock has shown remarkable momentum, with a YTD return of 54.77% and is currently trading near its 52-week high of $171.38.
In its initial outlook for 2025, Cloudflare’s forecast for the first quarter came in below expectations, but the guidance for the full year met analysts’ projections. The company also anticipates an acceleration in performance as the year progresses. InvestingPro analysis suggests the stock is currently trading above its Fair Value, with 18 additional ProTips available for subscribers looking to make informed investment decisions.
Mizuho analysts highlighted Cloudflare’s robust and scalable architecture, as well as its culture of innovation, particularly noting the potential in the AI inferencing market. Despite this, the firm cited Cloudflare’s high valuation as a reason for their continued preference for other high-growth software companies at this time. The reiteration of the neutral rating comes with acknowledgment of Cloudflare’s strengths and opportunities in the market. This assessment aligns with the stock’s current high Price/Book ratio of 54.94x.
In other recent news, Cloudflare has been the subject of various analyst reports. TD Cowen updated their price target to $162, highlighting a 27% increase in revenue and a 47% rise in customers with annual spending above $1 million. RBC Capital Markets raised their target to $170, citing the company’s robust year-end performance and potential for further growth. Citi analysts increased their target to $180, noting Cloudflare’s strong performance, significant customer acquisition, and robust bookings. Piper Sandler updated their target to $153, pointing out potential for re-acceleration in the second half of 2025. Lastly, Stifel raised their target to $175, praising Cloudflare for exceeding all key metrics in comparison to guidance and estimates. These are recent developments and reflect confidence in Cloudflare’s potential for sustained growth and market expansion.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.